Legislation, Self-Regulation Remain Points of Contention at Senate Privacy Hearing
Policymakers from the FTC and the Commerce Department urged tougher privacy protections that offer more choices for consumers. They testified Wednesday at an online privacy hearing of the Senate Commerce Committee. Sen. John Kerry, D-Mass., said he will introduce a measure that would balance consumer privacy protections with online ad interests. The purpose of this “commercial privacy bill of rights” is to encourage information sharing, “but under a common code of conduct that respects the rights of both the people sharing the information and legitimate organizations collecting and using it on fair terms and conditions,” he said.
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Every app “is an observational opportunity for a private company,” Kerry said. The collection and use of information offline, such as by grocery stores and airlines, has reached a record high, “enhancing the data businesses collect online,” he said. Although information sharing generates immense economic activity, “it has also created new opportunities for unethical collectors of information unwilling to abide by fair information practice principles,” Kerry said. “We cannot continue to let firms provide no protections, provide misleading statements of protection that they can change at will” or send the information along to others, he said.
NTIA Administrator Larry Strickling called for legislation to protect consumers online, and FTC Chairman Jon Leibowitz pushed for a Do Not Track mechanism to be included in any privacy policy. The NTIA suggests that a privacy law create “baseline consumer data privacy protections” based on a comprehensive set of Fair Information Practice Principles, Strickling said. It should give the FTC authority to enforce the baseline protections, he said. He recommended a framework that “provides incentives for the development of enforceable codes of conduct as well as continued innovation around privacy protections.” Legislation should allow the FTC to create a safe harbor for companies that adopt codes of conduct consistent with baseline protections, he said.
Tracking isn’t bad in itself, Leibowitz said. Policies besides a Do Not Track mechanism are beneficial, but “we also think there’s value in having the ability to opt out of targeted advertising,” or just targeted ads based on sensitive information, he said. Leibowitz said he’s encouraged by the industry’s efforts to regulate itself, including through the use of an advertising option icon. Do Not Track is still necessary, he said. The icon feature won’t result in a permanent opt-out for all ad networks, and “it doesn’t allow consumers to control collection of their personal data, just the blocking of ads that go back to them,” he said.
Legislators and regulators must be careful about the unintended consequences of a tougher privacy policy, said Sen. Claire McCaskill, D-Mo. “What I don’t want to do is handcuff the good guys,” she said. “I just want to make sure that we don’t kill the goose that laid the golden egg here under the rubric of a very laudable notion of privacy."
Microsoft and the American Civil Liberties Union support federal privacy legislation. The “current sectoral approach to privacy regulation is confusing consumers and costly to businesses,” Microsoft Deputy General Counsel Erich Andersen testified. Industry initiatives should coexist with baseline obligations of the law, he said. “Americans assume there is no central record of what they do and where they go go online,” said Christopher Calabrese, ACLU legislative counsel. Self-regulation by itself is a failed approach and “has allowed the current data collection practices to flourish,” he said.
GroupM Interaction, a media investment management company, uses practices that give consumers transparency and control over data, said John Montgomery, its North America chief operating officer. “One of the major benefits of industry self-regulation is the ability to respond quickly to changes in technology and business practices.”